German wholesale prices continue to drop amid weakening demand
Day in Review
Machine orders for the month of September were down -2.9% month over month coming much lower than the survey estimate of 0.9%. The figure also comes lower than the year to date average of -0.1%. September figures have been in negative territory for the past 3 years. On year over year basis, the story is much more positive with machine orders up 5.1% from the same period last year.
The sequential decrease in machine orders was driven primarily by broad decreases in orders across manufacturing sectors, down -5.2%, non-manufacturing orders down -30.1% and government machine orders down -45.2%. On a year over year basis, the growth in machine orders was supported by growth in nonmanufacturing orders, up 7.8%. Manufacturing orders and government orders were down -4.4% and -26.3 respectively.
Trade balance stood at Yen412.5billions for the month of September down from Yen741.4billions of last month. The goods trade balance recorded a surplus of Yen1.1billions while the services trade balance recorded a surplus of Yen401.2billions. The balance of payments stood at Yen1.6trillions coming below survey expectations and down from last month’s figure of Yen2.15trillions.
Bank lending for October was up 2%, the lowest figure for the year. Year to date average lending hovers around 2.3%. Increase in lending was driven by an increase in lending of 2% by major banks. Regional banks increased lending by 4.4%, Shinkin banks increased lending by 1% and finally foreign banks increased lending by 10.5%.
The wholesale prices in Germany dropped -2.3% year over year and -0.1% sequentially. Year over year decreases in prices was driven by a decrease in prices across agricultural materials (-1.7%), information and communication equipment (-5.9%) and specialized wholesale (-6.1%).